Correlation Between Uber Technologies and Expedia
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Expedia at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Uber Technologies and Expedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Expedia Group, you can compare the effects of market volatilities on Uber Technologies and Expedia and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Uber Technologies with a short position of Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Expedia.
Diversification Opportunities for Uber Technologies and Expedia
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Uber and Expedia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group and Uber Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Uber Technologies are associated (or correlated) with Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of Uber Technologies i.e., Uber Technologies and Expedia go up and down completely randomly.
Pair Corralation between Uber Technologies and Expedia
Assuming the 90 days trading horizon Uber Technologies is expected to generate 16.34 times less return on investment than Expedia. In addition to that, Uber Technologies is 1.2 times more volatile than Expedia Group. It trades about 0.01 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.18 per unit of volatility. If you would invest 33,238 in Expedia Group on September 14, 2024 and sell it today you would earn a total of 22,202 from holding Expedia Group or generate 66.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. Expedia Group
Performance |
| Timeline |
| Uber Technologies |
| Expedia Group |
Uber Technologies and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Expedia
The main advantage of trading using opposite Uber Technologies and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Expedia can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Expedia will offset losses from the drop in Expedia's long position.| Uber Technologies vs. Monster Beverage | Uber Technologies vs. Spotify Technology SA | Uber Technologies vs. Cognizant Technology Solutions | Uber Technologies vs. MAHLE Metal Leve |
| Expedia vs. Teladoc Health | Expedia vs. Uber Technologies | Expedia vs. GX AI TECH | Expedia vs. BIONTECH SE DRN |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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